Credit: The Most Important Grade You'll Ever Earn

Credit and debit cards have interest rates associated with them.

• True

• False

Your credit score helps determine whether or not you get credit, the amount you can borrow, and what interest rate you have to pay for the use of the money.

• True

• False

Using a credit card with a 15% interest rate, Caitlin buys an $800 HDTV. Each month she pays the minimum $10 payment the bank requires. She will have the TV paid off in 6 years, 8 months.

• True

• False

Credit should not be used to purchase furniture and appliances.

• True

• False

The following criteria are used in determining one’s credit score:

- payment history

- new credit issued

- length of credit history

- income

- types of credit.

• True

• False

Your credit report is a snapshot of your financial life and may be used by potential employers.

• True

• False

Using a credit card on impulse doesn’t affect your budget.

• True

• False

Financial planners recommend:

Total debt should NOT exceed 20% of your yearly after-tax income,

Monthly payments should NOT exceed 10 – 15% of your monthly net income.

• True

• False

Having many credit cards will not affect a lender’s willingness to lend money to me because I don’t carry a balance on any of them.

• True

• False

A year ago Caitlyn missed a credit card payment on her HDTV, but she caught up and paid the bill off. Her missed payment does not affect her credit score.

• True

• False